Facebook tries to defend its troubling masterplan to own India's internet

Facebook has provided a passionate defense of its controversial Free Basics program and its approach of "zero rating."

In the 19-page response [PDF] to a public consultation on the practice of "differential pricing for data usage" run by India's telco regulator TRAI, the social media giant argues that programs like Free Basics have "a track record of increasing internet access and use," and "should be recognized as tools for economic development, and encouraged."

Facebook insists that the arguments against zero-rating are "unaccompanied by hard evidence, and cannot even minimally bear that burden of proof." Instead, it says, the practice of providing free access to some content has real benefits that are "supported by concrete evidence in India and throughout the world."

In addition, it argues that there are literally no downsides to the approach, and that economists that have studied it "have shown that zero rating spurs Internet adoption without any market-distorting effects."

That position is quite some distance from critics of Facebook's approach, however. They claim Free Basics breaks net neutrality rules and is no more than a land grab in a huge and under-developed market: one billion Indians still do not have access to the internet.

Gatekeeper

People access the service through a Facebook app. Facebook acts as a gatekeeper to all content accessed through that app, and in a deal the company has struck with telco operators, users do not have to pay for the data they consume while using the app.

In response to accusations that Facebook was creating a walled garden and keeping out potential competitors, the company published developer guidelines and claims that anyone that meets them will be accepted.

However, that process is opaque at best and the technical limits on video, images, JavaScript, iframes and Java applets – which Facebook says are to keep data usage to a minimum – mean that competing services are not possible. So no Google or LinkedIn or Amazon or eBay.

Then there is the fact that Facebook reserves the right to rewrite URLs and all requests go through Facebook proxy servers. That means it sees and stores all the content and all the user data and statistics that pass through the service.

Facebook points out that it charges no one for this service, pays no one for the service, doesn't run ads, and the service enables people to test out the sort of information available on the internet without having to pay for it. It claims a good proportion of people subsequently decide to pay for access.

However, critics have drawn parallels to unpleasant corporate examples from the past, including Nestle's provision of free baby formula to developing countries and tobacco companies flooding Asia with cigarettes. By getting people used to Facebook's products and app, it effectively gives itself first-mover advantage in a huge and expanding market, even though hundreds of competitors already exist and are readily available online.

Zero hating

In this case, where TRAI's decision could end up simply blocking Free Basics, Facebook has been very keen to draw a distinction between net neutrality and zero-rating.

"Facebook is a strong supporter of net neutrality and believes that it is critical to the Internet's continued dynamic growth," it argues. "There is no inconsistency in supporting [net neutrality] ... and offering zero-rated services that benefit consumers and promote competition. Most regulators agree."

It notes repeatedly that the UK and US have strong net neutrality rules but have decided to review zero-rating situations on a case-by-case basis. And points out that "the vast majority of jurisdictions around the world" also allow for zero-rating.

In a sop to its critics, it adds that "merely repeating that zero rating violates net neutrality does not make it so." In a not-so-subtle appendix, it gives a rundown of how other regulatory bodies have handled the issue of zero rating across the world.

It also references a report that notes "almost half of mobile operators around the world offer some type of zero-rated service," although it doesn't find time to note that the report observes that "the zero-rated app in 65 per cent of these cases is Facebook."

Swamped

While Facebook's letter steps away a little from its previous disingenuous claims that it is offering Free Basics simply out of the goodness of its heart, it does still attempt to take the moral high ground and claim it is trying to bring economic growth and internet access to millions.

That claims does not appear to gel with the fact that the company has gone to enormous lengths to maintain the service, including full-page ads in Indian newspapers, editorials by CEO Mark Zuckerberg and an online campaign in which it encouraged and assisted Free Basics users to contact TRAI directly.

That campaign has contributed to an enormous number of responses: TRAI reported [PDF] receiving 24 lakh – or 2.4 million – responses to its consultation, which was only open for one month. "The majority of the comments received are template responses, many of which do not address the specific questions that were raised in the consultation paper," it noted in its summary.

Facebook was responsible for 1.9 million of that 2.4 million through two campaigns, with the vast majority of the remaining half-a-million coming from similar campaigns on the other side, the largest from SaveTheInternet.in.

The full list of comments stretches to 117 pages. Fifteen telco companies and 41 companies – included Facebook – also responded.

Now TRAI just has to make sense of it all. ®